(Yicai) April 12 -- Construction on Valeo’s new factory for driver assistance systems costing CNY2.9 billion (USD400.7 million) got underway in Shanghai earlier this week, as the French car components maker continues to invest heavily in China’s automobile industry.

Building of the 30,000-square-meter plant started on April 10 in Jiading district, the city's car manufacturing hub, China Securities Journal reported today. It will produce cameras for unmanned vehicles, LIDAR, domain controllers and chip-binding equipment.

It only took three months to start construction after signing the contract, six months faster than expected, thanks to the support of the Shanghai government, said Xu Kelin, general manager of Valeo Intelligent Transportation Systems Shanghai.

The new factory should be up and running as soon as the first half next year, Xu said. When operating at full blast, it will have an annual output of CNY2.5 billion (USD345.4 million).

Valeo has been hiking investment in China in recent years. In January, the Paris-based company said it will invest USD100 million in a facility in Changshu, eastern Jiangsu province that will make lights for cars.

And last May, its CNY1.1 billion (USD152 million) smart manufacturing center in Shenzhen was put into operation and it set up a driver assistance system R&D center in Shanghai.

Despite high labor costs in Shanghai and the rest of the Yangtze River Delta, Valeo continues to invest in the region because it recognizes the value of the country’s high-tech talent force in electrification and intelligentization, Zhou Song, president of Valeo China, told Yicai last month.

China now accounts for around 17 percent of Valeo’s total revenue, according to its latest annual report. Last year, Valeo’s China revenue soared 10.4 percent to CNY30 billion (USD4.1 billion).

Valeo entered China in 1994 and now has 35 plants and 14 research and development centers with around 18,000 local employees, including 4,500 R&D workers.

Editor: Kim Taylor